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Forbes: The New Rules of Money

#3 Low P/E Doesn't Equal Value

Many adherents to fundamental analysis and value stock investing seek stocks with below-average price/earnings multiples and price-to-book values. These “accounting-dependent” fundamentals proved to be traps during the financial crisis, when liquidity wreaked havoc on asset values and earnings. Cheap stocks, including many financials—-ranging from Fannie Mae to Washington Mutual—-became a recipe for disaster, and many still languish today.

(Photo via Forbes)

More from Forbes:
See More of the New Rules Of Money
20 Stocks Poised To Pay A Special Dividend
Cities Where Home Sales Are On Fire

The opinions expressed are solely those of the author and do not necessarily reflect the views of Comcast.

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